Growth and employment in the era of globalization: Some lessons from the Indian experience

The paper provides a political economy critique to the current development paradigm that India is following and argues for an alternative model which has employment at the centre.

The paper examines the current growth process that the Indian economy is going through, discusses its impact on employment and redistribution and goes on to present an alternative growth model that is more socially inclusive. In an era of globalization, India has witnessed extremely high growth rates of GDP, but employment has failed to keep pace, as evidenced by the decline in employment elasticities of output. The author provides a political economy critique of the present growth paradigm and argues that the corporate logic of efficiency that is often extended to the national economy tends to have results opposite to that which was desired. Instead, he presents an alternate growth model which has employment at the centre and growth results from employment generated, or an 'employment first' model of development. The author then puts forward the institutional requirements of such a model, and argues that decentralised governance is at the heart of such an inclusive employment strategy.